wateraustralia update
10 JULY 2011 water
regular features
In my article in the last issue of Water Journal, I described the
opportunities open to the Australian water sector by engaging
with the US market. This month, I want to go into a little more
detail on just one of the 'G'Day USA' water series events
that took place earlier this year, and why I and several other
participants regard the market so enthusiastically.
The mission commenced with the LA Water Forum held on 20
January. It was attended not only by Southern Californian water
district officials, but also by their counterparts from states within
the Colorado River Basin. Several speakers, both Australian and
Californian, drew many parallels between the water issues faced
by Australia and those faced by Southern California. There are,
of course, significant differences in the structure of the water
utilities sector in the US, and in the legislative framework and
political environment. These make it difficult to transpose solutions
implemented in Australia to southern California, and vice versa.
Alliance Contracting
An example on the Australian side is the use of alliance
contracting to build major infrastructure, such as desalination
plants. Alliance contracting is not well supported by the majority
of US state governments and is even prohibited by some. This
means governments must find or raise the infrastructure funds
themselves -- and in the post-global financial crisis economy this
is not straightforward. Other political and regulatory impacts of
relevance are the barriers presented to desalination technology
by environmental laws and the strong Californian environmentalist
lobby generally. Can these be positively addressed?
Experts on both sides of the Pacific believe that the
environmental considerations are not as disparate as they may
seem, and that the real issue relates to community engagement.
In Australia, decision makers were guided by a genuine water
shortage crisis but, in the process, we have built a great deal of
capability in major project facilitation, community engagement
and project structuring and management. This experience
resides in a mixture of the government and private sector
and this was the key message of the LA Forum. US audiences
have shown great interest in our experiences.
However, this is not to suggest that the dialogue is one-way.
Orange County has done something that Australian consumers
until this point have rejected -- it recycles wastewater directly
into drinking water with the full knowledge and acceptance
of the residents. Many here assert that parts of Australia will
needto do the same at some point in the future, so what can
we learn from Orange County to facilitate such projects?
A National Approach
It was by discussing and exchanging views on these common
problems that the idea of a national water sector approach to the
US market was first formed -- one which we are now pursuing
vigorously. By involving several companies in LA and the wider
mission, we could communicate the importance of the public-
private sector relationship in Australia in delivering integrated
water resource management success. As described last month,
most of the participating companies returned home to pursue
fresh US opportunities and I am confident of a healthy conversion
rate. There are also significant innovations in the US for which
Australian companies could provide profitable market access.
Understanding each other intimately at the policy and
regulatory level should have positive commercial spin-offs both
ways. The LA Forum experience was echoed, perhaps even
amplified, in other G'Day USA water series events, especially
in Denver and Houston. In Denver, the emphasis was on the
parallels between the Murray-Darling and Colorado River
systems. In Houston, it was on the energy/water nexus,
which is of growing significance in our own backyard.
All the while, awareness is being created of the products,
skills and experiences of the Australian water sector, which
should help companies seeking to engage in the US either
to pursue niche opportunities there, or collaborate with US
companies in other markets. The usual market rules will most
definitely apply: to succeed, companies must demonstrate to
potential customers some relevant competitive advantage that
delivers tangible benefits to customers, whether the advantage
is technical or commercial in nature.
waterAUSTRALIA will work with the Commonwealth and State
Governments, the Australian Water Association and industry to
develop this tremendous opportunity for our water sector.
The Case for a
Sophisticated Strategy
Les Targ -- CEO, waterAUSTRALIA
Australian innovative technology on show in LA.